The Ministry of Finance has proposed a plan of anti-crisis fiscal adjustment


Corporation was entitled to receive

The Finance Ministry and the audit chamber has regularly pointed to the problem of irrational use of budget funds by companies and corporations, where money is just lying on the deposits, but only now the authorities have moved from words to deeds. The Ministry of Finance has prepared amendments to the Budget code, which provide for the removal to the Treasury the interest received by corporations from placing of budgetary funds on Bank deposits, follows from the document placed on Wednesday on regulation.gov.ru. As we found out , this is only one of the items in terms of “tactical measures” to reduce the Federal budget deficit — this plan approved by the first Deputy Prime Minister Igor Shuvalov.

“The bill proposes to sources of non-tax Federal budget revenues include the revenues of public corporations from the placement of deposits with credit institutions funds received from the Federal budget”, — stated in the explanatory note to the draft amendments. The corporations want to withdraw 50% of the income from such funds, specified in terms of “tactics” available . This measure will only affect current now six state corporations Vnesheconombank, Rosatom, rostec, the DIA, the Fund of assistance to reforming of housing and communal services and “Roscosmos”. With subsidized from the budget of the state-owned companies (such as Railways or “Special economic zones”) in documents of the Ministry of Finance and government speech does not go yet, although they are also actively placing available funds in deposits.

The seizure of state corporations 50% of income on deposits is unlikely to significantly replenish the budget (exact data on the income of corporations is not, but similar income of the state of the chamber was estimated at 7.4 billion rubles in 2014), but rather will reduce the motivation of corporations to regularly place money in deposits. According to the chamber, the remains of budgetary funds on accounts of state companies and state corporations with 2014 and 2015 amounted to more than 600 billion rubles “Honestly, I did not know that money allocated in the Federal budget for these purposes instead of investing them in real production, in organization, in infrastructure, just lying in the accounts and in banks spinning for profit, it is not clear where going” — was recognized in November by President Vladimir Putin, when he was told about such a problem, the activists of the popular front.

Temporarily available assets of Fund of housing and communal services at the end of 2015 amounted to 58.7 billion rubles, of which 88% were placed on deposits in commercial banks, follows from statements of the Fund. In 2015, revenue from placement of these funds amounted to almost 5 billion rubles. the Fund enjoys tax exemption on income in respect of this income (this benefit was recently extended until 1 January 2018). Rosatom and rostec also have significant remains of temporarily surplus funds placed on accounts with credit institutions, the audit chamber said in the report on Federal budget execution for January—November 2015.

“Rosatom” does not place the Federal budget on deposits, and immediately passes it to subsidiary and dependent companies for the execution of targeted interventions under the Federal program, investment programs, etc., objects to the representative of “Rosatom”. The chamber in its report probably had in mind the own funds of the Corporation, he says.

DIA is conducting “moderately conservative” policy on placement of free funds and places funds in banks that are listed on the Agency’s website. It invests in deposits of Bank of Russia shares, bonds of international financial organizations corporate bonds bonds of RF subjects and Federal loan bonds. The “Roscosmos” no Deposit accounts in banks, said the representative of the Corporation. The representative of “Rostec” did not comment on the presence of deposits in the banks, but said that all remaining funds “rostec” has to transfer to the Federal budget before April 1. Finally, the VEB on October 1, 2015 no income on deposits in national banks, its quarterly report.

The budget is filled with plans

“Tactical measures” to reduce the budget deficit proposed by the Finance Ministry and approved at a meeting with first Deputy Prime Minister Igor Shuvalov, on 20 January, the meeting was attended by the head of the Central Bank Elvira Nabiullina, Deputy Prime Ministers Olga Golodets and Arkady Dvorkovich, presidential aide Andrei Belousov, Finance Minister Anton Siluanov, miinster of economic development Alexey Ulyukaev, head of the Ministry of industry and trade Denis Manturov and the Minister of labour Maxim Topilin. Last week the proposals were discussed at several budget meetings with Prime Minister Dmitry Medvedev and President Vladimir Putin. To deal with inefficient use of budgetary funds demanded Putin in early January during the discussions with the government on possible options of budget sequestration.

As follows from the documents to the meeting with Shuvalov, the Ministry of Finance proposed 11 measures to tighten budget discipline. In addition to the exemption of interest on deposits of state corporations, Treasury proposed to introduce the support of all government contracts, grants and budgetary investments. For expenditure on the state defence order made an exception, although it is with these costs the government raises the most problems. At the end of the first quarter of 2015, Minister Anton Siluanov warned that significant advances — of the order of 1 trillion rubles for goods, works and services — has led to growth in balances of Federal budgetary and Autonomous institutions. “The main growth advances provided through advance payments of the Ministry of defence,” — said the then Finance Minister.

Another significant part of the plan provides for different rules for withdrawing money from the recipients. In particular, it is proposed to introduce a requirement to reduce budgetary investment for those recipients who do not have time until 31 March 2016 to approve design documentation on objects of capital construction. In addition, the government plans to introduce a rule, which will be in October to withdraw from departments budget limits, if they have not started the cash execution of expenditures. In order not to give the authorities the opportunity to circumvent this limitation through the advance payments for works and services, the Finance Ministry proposes to abandon the advances in the implementation of public procurement of finished products of mass consumption. First of all, this measure will affect part of state programmes and Federal targeted programmes. The mechanism of the advance is proposed to replace the Treasury credit, Shuvalov has instructed the Finance Ministry to conduct an experiment with certain legal entities.

The return of budget money will be set not only for the ministries and agencies, but also for the regions they forbid carry to the next year balances intergovernmental transfers. Part of these activities, the Ministry of Finance has prepared amendments (posted on regulation.gov.ru) in the government resolution “About measures for implementation of the Federal law “On Federal budget for 2016”.

What are the steps

In the government and the Finance Ministry refused to disclose the cost of the “tactical actions”. “This is about the Commission to elaborate measures, and it is premature to talk about the quantitative indicator of economy”, — said the representative of the Secretariat Igor Shuvalov. According to him, the main expected effect of these measures is the reduction of ineffective expenditures of Federal authorities and state corporations. “It is very important to fix this behavior of government departments and state corporations to reduce inefficient spending in the framework of their activity as a regular practice, he said. The crisis teaches us much knowledge for the future.”

Most of these Finance measures aimed more at qualitative improvement in the management of state finances, the strengthening of administrative control — this can lead to some growth, but not significantly, says the head of direction “Fiscal policy” the Economic expert group (EEG) Alexandra Suslina. In particular, the measure to return 50% of income on deposits to the state is called rather to “scare” the Corporation from placing available funds in deposits, but a large influx of additional funds in the budget as a result of this measure should not expect, she says.

About inefficient use of budgetary funds have repeatedly said the head of the accounting chamber Tatyana Golikova. “A very large amount of resources is the so-called accounts receivable, she said on January 14 in live TV. — This is when contracts are allocated advances, but the work is not performed timely or not provided with relevant documentation in payment for these advances, and are allocated new money”. According to Golikova, on October 1, 2015, the volume of unsold advances only at the expense of the Federal budget had accumulated in the amount of 4.1 trillion rubles, “Why again to plan the expenditures for these purposes, if the funds are not selected?”.

Government sources said that on the eve of the meeting of January 20, Igor Shuvalov had a consultation with Tatyana Golikova.

All of these budgetary measures, the Finance Ministry described as “tactical”, a greater influence on medium-term budget planning and related operational plugging budget holes. To the sequestration of the budget, which was announced in mid-January, the government continues to move in no hurry. This is the 2nd of February in fact confirmed the Minister of economic development Alexey Ulyukaev reported that the updated macroeconomic projections, on which basis will be calculated the changes in budget 2016, will only be ready in April.